Core ideas:
The "trinity" base layout has a significant cost advantage. The company is a leading R & D and manufacturer of electroacoustic and wearable products in China. The company currently adopts the sales model of ODM, OEM direct sales and private brand sales. In business, we actively promote the strategy of "big customers, large orders", and actively promote flexible and intelligent production among manufacturers to reduce costs and increase efficiency. Through the base layout of the trinity of "Dongguan-Vietnam-Jiangxi", the company makes use of the comprehensive cost advantages of the three places to reduce production and operating costs and improve profitability. In the first three quarters, the company realized revenue of 1.79 billion yuan,-14.6% of the same period last year, and net profit of 154 million yuan, + 91% of the same period last year. The gross profit margin in the first three quarters was 15.86 percent, an increase of 5.7 percentage points over the same period last year, and the net profit margin in the first three quarters was 8.65 percent, an increase of 4.8 percentage points over the same period last year. The company has achieved remarkable results in reducing costs and increasing efficiency.
Bone conduction headphones and other new products ushered in the explosion, the company has obvious advantages in clamping position. In the company's revenue structure in the first half of 2022, headphone products accounted for 77.13% of the main revenue, and speaker products accounted for 17.88% of the main revenue. Smart wearable products account for 4.23% of the main revenue, a significant increase compared with 1.24% of the revenue of smart wearable products in 21 years. In terms of bone conduction headphones, the company has invested in Suzhou Suoyou Electronic Technology Co., Ltd., a developer of core devices such as vibrator motor, which has a significant advantage in clamping position. According to Canalys data, global bone conduction headphones shipped 8.83 million units in 21 years, an increase of 97% over the same period last year. It is a new breed of consumer electronics that is breaking out. It is expected that more than 1000w headphones will be shipped in 22 years. The company's card position advantage is obvious and the products launched in cooperation with many downstream customers are about to be shipped. Compared with the TWS headphone market, we believe that the current penetration rate of bone conduction headphones is still low and there is more room for growth in the future.
Watches, AR glasses and other new products orders landed, to grasp the low-cost + multi-category + vertical integration advantage. In smartwatch, the company has established cooperation with a number of terminal brands, orders continue to be landed, the company invested in Riowell Intelligent Technology Co., Ltd. to cooperate with its development of AR equipment products, mainly used in Honeywell, Siemens, BMW, Petrochina, Baosteel shares, Yili and other industrial customers, the future will gradually extend to the field of consumption. The company fully grasps the advantages of low cost + multi-category + vertical integration to realize the horizontal and vertical expansion of the business and lay a solid foundation for the sustained growth of performance.
Investment suggestion We estimate that the company's 2022-2024 return net profit is 165,298 million yuan, EPS is 0.49Compare 0.88 billion yuan, corresponding to 2022-2024 PE is 34.6X/19.2X/15.0X. First coverage, "recommended" rating.
The risk indicates that the downstream consumer electronics demand is lower than expected, the competition pattern is deteriorating, and the volume of new products is not as expected.